1. Project Management (1) Chapter 16, Part 1

2. Overview of Management 326 Operations and Operations Strategy Products, Processes, & Quality Operations Planning & Control Facilities and Work Systems Mathematical Tools for Operations © EJR 2006

3. Project Management, Part 1 Outline What is a project? Examples of projects Project performance expectations Project life cycle phases Ways to set up a project team Determining a project schedule (part 1) © EJR 2006

4. What is a project? A one-time set of related tasks that produce a major output and usually Involves many tasks Requires significant investment Uses significant inputs Has some tasks must be completed before others can be started Is strategically important to the firm © EJR 2006

5. Examples of Projects Entrepreneurship: Starting a new business Marketing: Designing and launching a new product or model Finance: Evaluating a merger or acquisition Finance: Developing a new financial product for investors Accounting: Changing accounting practices to conform to a new accounting regulation © EJR 2006

6. Examples of Projects Health care management: Opening a new hospital Operations: renovating a building CIFS: Selecting and installing new software Human resources management: Developing a new training program Economics: developing a new index to measure inflation © EJR 2006

7. Project Performance Expectations Achieve project objectives Meet quality specifications Completed on time Completed within budget © EJR 2006

8. Five Project Life Cycle Phases Conception: Identify a possible need Feasibility analysis: Identify costs, benefits, and risks. Decide whether to do the project. Planning: Determine project objectives and budget. Select a project leader. Set up project team and schedule. Execution: Do the project. Respond to unexpected problems. Termination: End project. Re-assign team members. Evaluate the project. What lessons should be learned from this project for use in future projects? Adapted from Reid & Sanders, 2005

9. Ways to Set Up a Project Team Full-time project team Working on the project is each team member's only job for the duration of the project. All team members report to the project manager. At the end of the project, team members must move on to other jobs or projects. Some may leave before the end of the project. © EJR 2006

10. Ways to Set Up a Project Team (2) Matrix organization Each team member works part-time on the project and also has other duties. Team member reports to his or her usual boss and the project manager. Each team member has 2 bosses and may have conflicting priorities At the end of the project, team members continue with their usual jobs © EJR 2006

11. Ways to Set Up a Project Team (3) Contracted project team Often used in construction, defense, and information technology projects Team leader may work for the company that needs the project Team leader may work for the primary contractor on the project The company that needs the project may benefit from outside expertise and does not have to hire workers Costs and completion date may be harder to control. © EJR 2006

12. Setting Up a Project Schedule Part 1 1. Determine what tasks (activities) must be done. 2. Determine the time for each activity 3. Determine the order in which the tasks must be done For a given activity X, it is enough to know what activities come immediately before activity X (called immediate predecessors or immediately preceding activities) 4. Set up a precedence table with activity times and immediate predecessors. 5. Draw a network diagram for the project. We will use activity on node (AON) diagrams. © EJR 2006

13. Setting Up a Project Schedule - Part 1 (continued) Activity on Node Diagrams Use a node (circle or box) to represent each activity Draw an arrow from each immediate predecessor to the activities that it precedes © EJR 2006

14. Setting Up a Project Schedule, Part 1 (continued) Determining Project Duration – Method 1 The duration of a project is the minimum time required to complete the project, based on the activity times determined earlier. A network diagram must have a unique first activity and a unique last activity. A path is a connected sequence of activities that begins with the first activity and ends with the last activity. The length of a path is the sum of the activity times for the activities on the path. The path with the greatest length is called the critical path. No other path requires more time than the critical path. The project duration is the length of the critical path.